JOB EVALUATION

Job Evaluation

Job evaluation is the formal and systematic comparison of jobs in order to determine the worth of one job relative to anotherThe comparison results in a wage or salary

hierarchy

Compensable factors are fundamental elements of a job

Compensable Factors

Two approaches in comparing jobs – Intuitive or via compensable factors

Intuitive based on decision that one job is more important than another

Compensability determined arbitrarily but some examples include:

SkillEffort

ResponsibilityWorkconditions

Know-howProblemsolvingAccountability

Preparing for the Job Evaluation

Its mostly a judgmental process which requires cooperation among managers

Identify the need for the program Get cooperation Choose an evaluation committee who will

do the evaluation

Job Evaluation Committees

Performs 3 main functions:Identifies 10-15 key benchmarks

Selects some compensable factors

Evaluate the worth of each job via one of the methods on the following slides

Job Evaluation Method 1:Ranking

Obtain job information Select raters and jobs Select compensable factors Rank jobs Combine ratings

Try not to rely on guesstimates

Best for small organizations

Method 2: Job Classification

Rates categories of jobs into groups

Groups called classes if jobs are similar

Called grades if groups contain different jobs of similar difficulty

Ways to Categorize Jobs

Write-up class or grade descriptions

Draw up a set of guidelines

Choose compensable factors and develop class or grade definitions

Method 3: Point

The point method is more quantitative Identifies compensable factors The degree to which each of these factors is

present Assume five degrees of “responsibility” Most widely used method

Method 4: Factor Comparison Factor comparison is a widely used method to

rank jobs by a variety of skills and difficulties, then adding these to obtain a numerical rating for each job

With this method you rank each job several times—once for each of several compensable factors

Combination of Ranking and Point method.

Computerized Job Evaluations

Other methods can be time consuming CAJE or computer automated job

evaluation streamlines things Simplifies job analysis Increases objectivity Manages data Uses structured questionnaire and

statistical models

Group Similar Jobs Into Pay Grades

A pay grade is composed of equally difficult jobs Once it’s used job evaluation to determine the relative

worth of each job, the committee can turn to the task of assigning pay rates to each job; however, it will usually want to first group jobs into pay grades.

If the committee used the ranking, point, or factor comparison methods, it could of course just assign the committee will probably group similar jobs (in terms of their ranking or number of points, for instance) into grades for pay purposes.

Instead of having to deal with hundreds of pay rates, it might only have to focus on, say, 10 or 12. A pay grade is comprised of jobs of approximately equal difficulty or importance as established by job evaluation.

Correcting Out-of-Line Rates

Correct pay for gradeToo low – raise pay

Freezing wages, transferring or promoting

Too high – lower by